Sandy Gadow, a featured guest on CNN's "Open House," and a speaker on national radio as the escrow expert and has more than 25 years experience in escrow, title and real estate. A  mortgage broker and real estate sales associate, Sandy is a member of the American Land Title Association, the National Association of Realtors, and on the advisory council for the Escrow Career Center. She is the author of The Complete Guide to Your Real Estate Closing and a guest contributor to Nolo's Essential Guide to Buying your First Home. She specializes in assisting the American as well as international client. If you have questions for Sandy see our Ask Sandy page. Here are a few recent articles.

Exceptions To Coverage In Your Title Insurance Policy

Your title insurance policy will list certain exceptions that will be excluded from coverage. This is a standard practice, but you should be aware of which items are exempted and therefore not covered. Owner's policies usually contain a list of some of the following standard exceptions. These exceptions may include:

• boundary line disputes
• easements or claims of easements not shown in the public records
• taxes or special assessments left off the public record
• claims of people who turn out to be living in the house ( such as a prior owner's tenants) if their being there isn't a matter of public record
• unrecorded mechanic's liens
• mineral and/or water rights

You have the option of paying an additional fee to obtain "extended coverage" for any items you want included in your policy. Your title officer can tell you which endorsements are available. Other exceptions which are generally excluded from coverage include zoning, environmental protection laws, matters arising after the effective date of the policy, and matters created, suffered, or assumed by the insured. Some other exceptions could be subdivision and building codes, and matters known to the insured, but not shown on the public records and not disclosed to the insurer.

Your lender will normally request certain endorsements added to their lender's title policy. These endorsements will often insure against defects found only by inspection of the property, or by a survey, unrecorded liens and easements, mining claims and water rights, and right of parties in possession of the property. Title policies covering a condominium property will also require special endorsements added to the policy.

Go over your title policy carefully to see what is included and which items are to be excluded from coverage. If you find items of concern, discuss these with your escrow agent or closing attorney. Any changes to the policy of title insurance should be made before the close of escrow. It is possible to remove exceptions by means of special endorsements, but the title company must be aware of any special requests as soon as possible. Keep in mind that title insurance gives you coverage only up to a certain point in time for all events which took place during a previous point in time. A lien that is recorded after title insurance is issued, will not be insured against a claim. Some areas provide for your title company to issue inflation coverage. This is an optional coverage item, is relatively inexpensive and may be worth considering.

Your lender will normally request certain endorsements added to their lender's title policy. These endorsements will often insure against defects found only by inspection of the property, or by a survey, unrecorded liens and easements, mining claims and water rights, and right of parties in possession of the property. Title policies covering a condominium property will also require special endorsements added to the policy.

Copyright © 1999 Sandy Gadow. This column may not be resold, reprinted, resyndicated or redistributed without the written permission from Escrow Publishing Company.

Related Articles

What are the three types of easements?

What is an unrecorded easement?

Why do I need a Survey?

Related Question

Will title insurance cover protection for eminent domain?

Eminent domain, or the government's right to take land for the public good is not covered by title insurance.  At this time, there are no special endorsements which can be purchased to protect against this governmental right.
All levels of government, whether federal, state, county, or municipal may exercise their right of eminent domain.  A due process must be followed, however, starting with a filing of a lis pendens, or notice that litigation is pending.  Just compensation must be made to the land owner. Typically, eminent domain is used for widening a road or in obtaining an easement. Recently, the right of eminent domain was exercised to condemn and obtain land to build commercial businesses on residential land, which was deemed to be in the best interest for the town. ( The 2005 U.S. Supreme Court decision, Kelo v. New London has spurred some states to push for more restrictive uses of eminent domain).  

Related Information

Title Insurance Glossary

Look up title insurance terms and definitions

Back to Previous Page

[ Home ] [ About Us ] [ All About Escrow ] [ Articles ] [ Ask Sandy ] [ Books ] [ Glossary ] [ Contact Us ] [ Links ] [ Mortgage Calculator ] [ Order ] [ Q & A ] [ Reviews of The Complete Guide ] [ Schools ] [ Search Site ] [ Suggestions ] [ Survey ]

Copyright 1999-2012 © Sandy Gadow—All rights reserved.
All information is deemed reliable but is not guaranteed and should be independently verified.